Under GAAP, with Respect to Multiple-Element Arrangements, If the Revenue

question 133

Multiple Choice

Under GAAP, with respect to multiple-element arrangements, if the revenue for a particular part of a multiple-part arrangement does not qualify for separate recognition, it is:

• A)Never recognized.
• B)Recognized when the contract is signed or persuasive evidence of an arrangement exists.
• C)Recognized when revenue for the other parts is recognized.
• D)None of the other answers is correct

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Definitions:

Discount

A reduction applied to the nominal price or face value of something for promotional purposes, or to reflect current market values.

Forward Contract

A financial derivative contract obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

Exchange Rates

The rate at which one currency can be exchanged for another.

Spot Rate

The current market price used for immediate settlement of transactions involving a foreign currency.